I’ll Give You 10 Bitcoin for That Castle

April 2018

LOS ANGELES, CALIFORNIA

Bitcoin remains largely a tool for high-risk investors. One reason is, at current exchange rates (as of this writing), one bitcoin equals $10,915. In recent months, cryptocurrency holders have seen their investment’s value spike to double that, and exchange rates were only one-to-one with US dollars in 2011. Volatility aside, at its present value, one market in which bitcoin exchange is receiving wider interest is luxury real estate. Described as the confluence of two bubble-prone commodities, offering homes to bitcoin purchases has opened a previously untapped market of new wealth. The problem is, brokers have found it difficult to find escrow and title companies that trust the currency or know how to process it. Showing a blockchain account on a phone is not exactly a convincing proof of funds, and Chase Bank, for example, will not touch the currency because of its preference among traffickers in ill-gotten gain. But, if two parties can agree, bitcoin sales can proceed with fewer middlemen and near-instantaneous approval periods. The seller can be protected by a futures contract that locks in the price of the coin, but he would have to pay capital gains taxes if he cashes in his bitcoin.